The version 1.9.5.3 update, which is now rolling out automatically to iQ3 owners, promised several improvements to issues such as recording, storing and deleting shows, as well as overall improved stability.

Foxtel's iQ3 video recording device.

But customers have reported new problems after refreshing their iQ3's software, with more than one user describing the update on Foxtel's community forum as "10x worse" than the previous update, which came in May.

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Reported problems include picture and menus disappearing; frozen screens; remote control unresponsiveness; programs being deleted or not recording properly; and needing to reboot the iQ3 multiple times a day.

"4 faults so far after new software ... It worked better with the old version," said "Jooster" on the forum.

The company said it prioritised software updates based on customer feedback, but admitted the new update "hasn't addressed everything you've been waiting on".

Frustrated users will have to wait months for the next software update, with Foxtel community manager Nik confirming the company would be pushing out updates only every two to three months.

"The priority of these updates will be driven by customer feedback provided via the community and also from customer technical contacts," he said.

Foxtel flagged improvements to the performance, speed and stability of the iQ3 in the next update, in particular to its "reliability and Bluetooth functionality".

But some customers are fed up with waiting for fixes and are already shifting back to the iQ2 device, which is now several years old.

Meanwhile at Foxtel, the iQ3 is causing fraught issues internally.

The company's official line is that technical call volumes from customers about iQ3 have followed a "similar pattern" to the iQ2 after launch, and that it has seen subscriber issues "diminish significantly, especially since the first software update".

"The best measure of problems being faced by customers is technical call volumes," the Foxtel spokesperson said.

Although Foxtel does not officially disclose details of the number of products sold, an inside source told Fairfax Media there were more than 90,000 iQ3 devices in Australian homes with only "a very small proportion" reporting any issues to the company.

However, a separate internal source said technicians were quietly advising potential customers "not to bother" with iQ3, and described the product as still "in beta".

Support staff are also reportedly admitting to customers that iQ3 remains a "work in progress", four months on.

This was backed up by a third source close to the matter, who said Foxtel staff would "fully admit they [iQ3 boxes] are not up to scratch when you call in".

Foxtel released the iQ3 on March 23, just one day before US streaming giant Netflix launched in Australia.

The company has continually denied it rushed the release to compete with Netflix.

with Ben Grubb

Fairfax Media has a joint stake in video streaming service Stan with the Nine Network